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There is No Presumption of Undue Influence in Probate!

I have written about this topic on a number of occasions.[1] When a person attacks either an inter vivos gift or a will for undue influence, the onus is on the attacker to prove the undue influence.

However, when an inter vivos gift is attacked on the ground of undue influence and it is shown that the donee stood in a fiduciary or confidential relationship toward the donor, so that the donor was vulnerable to the donee and the donee was therefore in a position to exercise undue influence over the donor, equity raises a presumption of undue influence. The onus of proof then shifts to donee to disprove undue influence. If she is able to do that, the gift stands, otherwise it fails.

But when a will is attacked for undue influence, the onus always remains on the person who attacks the will, even if the person who benefits under the will is a fiduciary. This is a probate principle that has been applied by courts of probate for hundreds of years. And principles of equity were never relevant in courts of probate. Nor are they relevant now in the Superior Courts as they apply the law of probate and its principles, which they inherited from the Surrogate Courts when these were abolished the 1990s.

So why am I writing about this topic again? Because another case was just released which repeats the mistake, often made in the past, of assuming that a presumption of undue influence can be raised when a will is attacked for undue influence.

In many respects Shannon v Hrabovsky[2] is unexceptional and so are its facts. A testator made a series of three wills. In the first two he appointed his daughter and son executors and benefited them and their families more or less equally. In the third he appointed his son and his brother executors and the son ended up with most of the estate. There was medical and lay evidence suggesting that the testator lacked capacity when he made the third will. There were also a number of suspicious circumstances. The daughter attacked the will for lack of capacity and undue influence.

In passing, the court also had to address a limitations defence. The son argued that the daughter’s notice of application was dated more than two years after the testator’s death. However, the court applied Leibel v. Leibel,[3] which did indeed hold that there is a two-year limitation period when one attacks a will, but that this period is subject to the discoverability principle. The court found that the daughter did not learn of the third will until some time after the testator’s death and that the limitation period did not begin to run until she did learn of the will.

Justice H.J. Wilton-Siegel examined the evidence closely and found that there were indeed suspicious circumstances. The court held, correctly, that the onus of proving capacity rested on the executors and concluded that on a balance of probabilities they failed to prove that the testator had capacity when he executed the third will. I have no issue with this conclusion and the facts were such that the court could readily reach this conclusion.

But I do take issue with the way in which the court addressed the issue of undue influence. Justice Wilton-Siegel stated that it was not necessary to address the alternative claim of undue influence because of the holding on testamentary capacity. However the court nonetheless discussed the issue. The court found that the testator became increasingly dependent on the son and was therefore vulnerable. Again, I have no issue with these findings of fact. But then Justice Wilton-Siegel stated in para. 116: “In such circumstances, the law presumes that an individual is in a vulnerable relationship and that, therefore, a potential for undue influence exists. Accordingly, the [executors] have the onus of rebutting the presumption of undue influence.” Based on what I said above, this is wrong. In probate the onus always remains on the attacker, i.e., the daughter in this case. The statement is particularly strange, since Justice Wilton-Siegel quoted at length from the judgment of Cullity J. in Scott v. Cousins,[4] in which the latter says: “The burden of proof with respect to fraud and undue influence remains with those attacking the will.” Justice Wilton-Siegel then quoted extensively from the judgment of Wilson J. in Geffen v. Goodman Estate,[5] in which the latter discusses the presumption of undue influence. However, Geffen was an inter vivos case and was therefore not relevant to the discussion.

The statement of Justice Wilton-Siegel is all the more strange in light of the fact that in Seguin v. Pearson[6] the Ontario Court of Appeal confirmed the distinction between the probate law of undue influence and the equitable presumption of undue influence in inter vivos gift cases. The Seguin judgment was released on 10 April 2018, well before the Shannon case was decided. Counsel should have cited it and if they had, this error could have been avoided. In the end result it did not matter, as the court found that the executors rebutted the presumption of undue influence and also that the daughter failed to establish that the testator had been subjected to undue influence when he made his third will.

Still, the error remains and in other cases it may well make a significant difference whether the onus shifts to the recipients of the testator’s bounty because of a supposed presumption of undue influence.

I hope that, after Seguin, we shall see no further examples of this egregious error.

[1]      See, e.g., Oosterhoff on Wills, 8th ed. by Albert H. Oosterhoff, C. David Freedman, Mitchell McInnes, and Adam Parachin (Toronto: Thomson Reuters/Carswell, 2016), §6.5; Albert H. Oosterhoff, “The Discrete Functions of Courts of Probate and Construction” (2017), 46 Adv. Q. 316, §4, Excursus, at 339 and passim; and Albert H. Oosterhoff, “What Is a Will and What Is the Role of a Court of Probate?”, posted 26 September 2018, http://welpartners.com/blog/2018/09/what-is-a-will-and-what-is-the-role-of-a-court-of-probate/, text at footnotes 15-17. It would be supererogatory for me now to list the authorities I cited on those occasions again.

[2]      2018 ONSC 6593, judgment released 2 November 2018.

[3]      2014 ONSC 4516.

[4]      (2001), 37 E.T.R. (2d) 113 (Ont. S.C.J.).

[5]      [1991] 2 S.C.R. 353 at 369-70.

[6]      2018 ONCA 355.

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